China central bank skips open market operations as first phase of RRR cuts come into effect

[SHANGHAI] China's central bank said it will skip open market operations on Wednesday as liquidity levels in the banking system were "reasonable and ample".

The People's Bank of China (PBOC) said the first phase of reserve requirement ratio (RRRs) cuts came into effect on Wednesday, and the move released about 100 billion yuan (S$19.9 billion) worth of long term funds.

The central bank said last Monday that it would implement its cut in RRRs for some small- and medium-sized banks in three phases, as part of wider efforts to help companies weather a slowdown in the world's second largest economy.

On a net basis, the PBOC will drain 10 billion yuan from the market for the day via open market operations as the same amount in reverse repos is due to mature on Wednesday.

REUTERS